Advocacy and Lobbying Rules for Private Foundations — Course Transcript
Maya: Hi, I’m Maya! As you know, we do amazing work through private foundations, and like you, I’m here to find out about the lobbying laws we need to be aware of to meet our goals.
Narrator: I’ll guide you along the way!
Maya: Huh? Hi, oh great!
Narrator: Like you said, we’re going to focus on the lobbying laws. This is only one legal issue that’ll come up in your work, but it’s an important one.
Maya: Oh good. I just started here at a private foundation. I’m so excited to get started and make real change in my area! I know a lot, but I have to admit I’m a little overwhelmed at the amount of stuff I’ve got to catch up on to get started. I want to get started on my work locally, nationally and across the globe!
Maya: I have a lot of questions about what I can and can’t do at a private foundation.
Narrator: That’s fine! This training will show you how to remain within the law when the grants you fund, or the activities you engage in as a staff member, involve advocacy or lobbying. Remember, you’re responsible for the grants you recommend and the activities you engage in. It’s important to know what the grantee is proposing to do. We’ll cover the basic legal rules and provide you with tools you can use to navigate through some potentially sticky situations and to ensure compliance with the rules.
Maya: Great! So after this training, I’ll have all the information I need?
Narrator: Well, this will be a really good start, and you can refer back to this training as a refresher, but as those sticky situations come up in real life you should always seek assistance. Depending on your organization, assistance could come from: Grants Management, Legal, or the department in your organization that handles compliance issues.
Narrator: Now, this course consists of three modules:
- Module One provides an overview of how lobbying laws apply to the work of private foundations. It explains whom and what private foundations can legally fund when lobbying and advocacy are part of the work.
- Module Two reviews the types of grants and funding options private foundations are allowed to provide. It explains how to fund when advocacy and lobbying are involved.
- Module Three provides guidelines and tools to help you engage with grantees and legislators.
Narrator: If you’re taking this course for the first time, it’s best that you go through each module in order.
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Well, that’s it — pretty simple. When you’re ready, go ahead and click the pulsing play button to move to Module 1, or the module buttons to go to any of the modules or click the course map to go to a specific topic within the modules.
Maya: Hi, Maya here! I’m so excited to get started on my work. I’ve heard that I should be concerned about lobbying laws, but I don’t know how they affect my work. What do I need to be aware of? I have a lot of questions about what I can and can’t do at a private foundation. What can I say? What shouldn’t I say? How do I keep all this in mind while still achieving my programmatic goals?
What if I do the wrong thing right off the bat? What if I say yes to something I shouldn’t? What if I put the foundation at risk? What if my mistake stops progress on policy change? What if my legal team starts to hate the sight of me? What if I…What about…What….
Narrator: Hold on, Maya! You’re not in this alone!
Narrator: That’s what this course is all about. I’ve been around this block a few times. Settle in and I’ll answer some of your questions.
Narrator: Let’s get started. I’ll fill you in on how private foundations differ from public charities, help you differentiate between advocacy and lobbying, and explain what grant activities a private foundation can fund and the advocacy activities staff can engage in. I’ll provide some basic knowledge about the laws so you can learn to spot issues along the way and know when to reach out for additional help.
OVERVIEW: Private Foundations & Public Charities
Maya: Great — with this background information, I can help my foundation fulfill our mission and goals. Sounds good… Let’s go!
Narrator: Let’s start. Lobbying is heavily regulated by laws at all levels: local, state, federal and international.
Narrator: In this course, we’ll focus primarily on the IRS rules for private foundations and introduce some others. As you know, the IRS is the regulatory agency that collects taxes in the United States. It sets rules for tax exempt organizations like private foundations and public charities. There are other types of tax exempt organizations that you might have heard of, like 501(c)(4)s, 501(c)(5)s or 501(c)(6)s. For this training, we’re going to focus on private foundations.
Maya: So… what do I need to know about the IRS rules for private foundations?
Narrator: Well, the IRS lobbying rules apply differently to public charities and private foundations. This can be confusing to some. Click each item to learn more.
Maya: Thanks — that clears it up for me. I’ll need to remember to explain this to my grantees, partners, and maybe a few public officials, too. Now, how do I know if what I’m doing, or what my grantee is doing, is advocacy or lobbying?
Narrator: Let me try to explain the difference.
Maya: Ah, that’s the phone. Excuse me a moment…
OVERVIEW: Definition of Lobbying
(phone rings — Charlie Brown-style sounds depict Senator speaking)
Maya: Hello? Oh, hello, Senator. Great to hear from you. A meeting? Thursday? To discuss the upcoming Farm Bill? Drafting proposed language? Change the world? I’d love to…
Maya: Huh? Oh, hold the phone, Senator… What? I’ve been waiting for a call like this!
Narrator: Watch your step here, Maya… before you commit, you’d better know a little more about the lobbying rules.
Maya: Ah, right! Oh, Senator — can I call you right back? [hangs up] Okay, tell me what I need to know! How do I know when it’s advocacy or lobbying? What’s the difference?
Narrator: Let’s look at advocacy and how the IRS defines lobbying. Click each term to find out.
Narrator: Private foundations can fund and engage in an unlimited amount of non-lobbying advocacy as long as the activities funded further the private foundation’s charitable purposes. I wish I could give you a more specific definition of this term, but advocacy is very broadly defined. For your work, you should understand how to identify lobbying, and be sure that the work you do and the grants funded do not constitute impermissible lobbying.
Narrator: The IRS defines two types of lobbying: direct and grassroots.
Narrator: Funding and engaging in advocacy are powerful tools available to private foundations for creating long-lasting policy change. The Foundation can fund a wide variety of advocacy activities, but we’re prohibited by the IRS from earmarking funds for lobbying activities or engaging directly in lobbying activities.
Narrator: Now, let’s look at what constitutes lobbying under the IRS rules. Keep in mind that to qualify as lobbying, a communication must satisfy all of the elements of this definition. If one of the elements is missing, it’s not lobbying. Think of it like a mental checklist! Also, the IRS rules apply to private foundations, no matter where in the world they’re active. So lobbying activities can actually be domestic or international. Let’s look at the definitions of Direct and Grassroots lobbying and some examples.
Narrator: According to the IRS, direct lobbying is a communication with a legislator, legislative staff member, or any government official participating in the legislative process that refers to and expresses a view about specific legislation.
Narrator: The term Legislator includes the people listed here.
Narrator: According to the IRS, grassroots lobbying is communication with the general public that refers to and expresses a view about specific legislation or a specific legislative proposal and includes a call to action.
Narrator: Communication includes any possible way to carry a lobbying message. You can communicate in person, by phone, email, or text message, by wearing a T-shirt, and even with a cake…
Narrator: Click the pulsing play button to read some examples of specific legislation. Keep in mind that “specific legislation” refers to legislation when it is proposed, in draft form, or introduced or pending. A discussion of a broad social problem (such as “reduce childhood obesity” or “decrease illegal dumping”) does not count as specific legislation.
Maya: It looks like a “call to action” is a key characteristic of grassroots lobbying. How do I know whether a communication includes a “call to action?”
Narrator: It’s simple. A call to action is communication that encourages the recipient to take action to influence specific legislation. There are four types of calls to action. Take a look at the examples listed here. If a communication doesn’t contain one of these types, then it isn’t grassroots lobbying.
Maya: I’ll highlight that on my mental checklist.
Narrator: We’ve covered the IRS definitions of Direct and Grassroots lobbying in great detail. Let’s make sure we’ve got the elements of Direct lobbying down. Remember, Direct lobbying is a communication with a legislator, legislative staff member, or any government official participating in the legislative process, expressing a view about specific legislation or a specific legislative proposal. Select the correct answers. Click the “Submit” button when you’re ready to get feedback.
OVERVIEW: Spotting Lobbying Issues
Narrator: Now it’s your turn to do the driving. Take a look at each of these images. For each image, decide whether it represents direct lobbying or grassroots lobbying, or is not lobbying. Drag and drop each image to the correct category. Roll over each image to view a version of the full image. When you’re done, click the Submit button. If you need help, click the help icon to review the definitions of direct and grassroots lobbying.
OVERVIEW: Consequences of Lobbying
Maya: Hmmm. So… what’s the worst that could really happen if I break the rules?
Narrator: That’s a good question. We’re talking about these rules for an important reason. A violation could result in a penalty, but our goal is to help you know the rules and also to know when to ask for further help.
Maya: Well, that makes a lot of sense. I can see that the IRS rules affect my job in a couple of ways: first, in grant work, such as reviewing proposals and reports, and second, what I say and do as an employee of a private foundation.
Narrator: Exactly. We’ll address these topics in further detail in modules 2 and 3. We’ve just gone through the IRS rules. Before we move on, I want to highlight some of the non-IRS rules that may also apply to your work.
OVERVIEW: Federal Lobbying Disclosure Act and State Lobbying Laws
Narrator: Know that there are separate rules on the international, state, and local levels and from the Federal Lobbying Disclosure Act or FLDA.
Narrator: Let’s look at the FLDA. The Federal Lobbying Disclosure Act relates to lobbying contact with covered federal officials. The FLDA is quite different from the rules we’ve been speaking about. Let’s take a look at it, shall we?
Maya: Yes, I know that sometimes I’ll work closely with public officials, so I’d better know more about the FLDA.
Narrator: Here are a few things to remember: The IRS rules on lobbying we just discussed ALWAYS apply. So if it’s “lobbying” as defined under those rules, the Foundation is limited in what it can do. The FLDA is a disclosure law. It works a bit differently. Simply put, it requires disclosure of certain discussions (called “contacts”) with covered federal government officials. If you think your work will involve discussions with federal government officials, it would be a good idea to seek assistance before you have those interactions.
Maya: Okay, so what about the work I’ll do to try to move issues on the state, local, or international level? Are there more rules?
Narrator: Yes, there are. Each geography defines “lobbying” individually. For example, state lobbying laws can require disclosure of lobbying activities but might not prohibit them. Also, some states have definitions of lobbying with a broader scope than the Federal rules do. Many states define lobbying to include attempts to influence legislation and administrative action, too. That includes regulations. State lobbying disclosure acts also impose registration and reporting requirements, which can be burdensome. In addition, local and foreign jurisdictions may have their own lobbying rules, so be sure to get assistance if you or your grantee will be trying to move an issue at those levels.
Maya: So to recap… it sounds like I need to get assistance if I think my work or activities as an employee or the work that we fund might raise any lobbying issues. I should also seek assistance to find out about any state, local, or international rules that might affect my work. Here are my takeaways…
[After takeaways have displayed]
Narrator: Congratulations! You’ve completed this module. If you’re grant-making staff, click the pulsing play button to move to Module 2, or click the course map to go to a specific topic.
FUNDING ADVOCACY: Introduction
Narrator: Welcome to Module 2. Here, you’ll get an overview of the types of funding options available to you, and the strategies you can use to stay in compliance with federal, state, and international law.
Maya: Well, I’m starting to get settled in, and I’ve inherited a bunch of grants. I have a new proposal from a potential grantee that I’m really excited about. It looks like their organization is geared up to make great policy changes. They’re planning to work on securing some crucial legislative changes, and I think this might be an important opportunity for this movement. I’m really fired up for this! (Grants_02)
Narrator: Maya…careful now…
Maya: Urgh! That’s right! We can’t earmark funding for lobbying! What can I do? What help do I need? Should I go to legal right now? Maybe if I move quickly I can cover all my bases … (speeds up) (Grants_04)
Narrator: Uh-uh. Hold up! Wait, Maya!
Maya: Okay, okay! Where do we start?
FUNDING ADVOCACY: Project Grant Rule
Narrator: The rules say that private foundation funds can’t be earmarked for lobbying. First, the structure of the grant matters.
Maya: Ok! I know there are two types of grants we can make: a general operating support grant or a specific project grant, right? Narrator: That’s right! Click each term to learn more.
Narrator: If you have a specific project grant that supports a project that includes lobbying, then you have to satisfy the Project Grant Rule. Let’s see what that means. First you need to know the total budget for the project, which is, say, $100,000 [highlight “Amount of project =$100,000”]. Next, the grantee needs to identify the total cost of lobbying activities in the project. Let’s say that’s $40,000 [highlight “cost of lobbying activities = $40,000”]. That leaves $60,000 of project expenses that are nonlobbying [highlight “costs of non-lobbying activities = $60,000”]. Note that this project is funded with a private foundation grant and other funding [highlight “amount of private foundation grant = $50,000 and then highlight “amount of other funding = $50,000”]. So long as the amount of the foundation’s grant [highlight “Amount of private foundation grant = $50,000”] does not exceed the non-lobbying portion of the project [highlight “Cost of non-lobbying activities = $60,000” again], the foundation can show its grant is not earmarked for lobbying. This example illustrates the Project Grant Rule.
Narrator: Here are the three IRS rules on how to satisfy the Project Grant Rule. Remember to be explicit about what the foundation needs.
Maya: Okay, I want to be sure I understand these rules because it sounds like an allocated budget is an important part of the Project Grant Rule. I’ll need to know this for specific project grants that include lobbying activities.
Narrator: That’s right — you certainly will.
Narrator: Here are some other tips on the Project Grant Rule to remember: A foundation can’t be the sole funder of a project that includes lobbying. It’s OK if the private foundation doesn’t know the identity of the other project funders, or knows that the other funders include other private foundations. Also, the amount of the foundation’s grant cannot exceed the non-lobbying amount of the project.
Maya: Great, I’ll be sure to check the budget for those things.
Narrator: Well, you should always read the proposal in conjunction with the budget. You, as a program staff member, need to be able to determine that the lobbying amount indicated in the budget is reasonable. The foundation is relying on you to be responsible for ensuring that the lobbying amount is reasonable.
Maya: Got it. So, let’s say we’re the sole funder of a specific project. What funding restrictions exist in that case?
Narrator: If a private foundation is the sole funder of a specific project, no lobbying is permitted.
Narrator: Now that we’ve discussed the two different types of grants, General Operating Support and Specific project grants, be sure to keep in mind that all communication with the grantee can be considered earmarking, no matter what form it’s in.
FUNDING ADVOCACY: Exceptions to Lobbying
Maya: Aren’t there any exceptions to lobbying restrictions? What CAN I do?
Narrator: Yes, there are, and as we talked about in Module 1, there’s a lot of public policy work that does not meet the definition of IRS lobbying, such as attempts to change regulations or gathering and analyzing data to inform policymakers and the public. In addition, there are three common exceptions to lobbying used by private foundations. Click each term to learn more.
Narrator: The first exception is for nonpartisan analysis, study, or research.
Narrator: The second exception is for written requests for technical advice.
Narrator: And the third is for jointly funded projects with the government.
Maya: Okay — these exceptions will come in handy!
Narrator: Yes they will, as long as you use them as intended. Using the exceptions can be powerful tools, but you should always seek out further assistance if you have questions.
FUNDING ADVOCACY: Lobbying Analysis Tool
Narrator: Here’s a simple process to use when reviewing grants and contracts for compliance with the IRS lobbying rules.
Maya: Hey! You can click the Save button to save a copy of the Lobbying Analysis Tool to your desktop.
Narrator: Take a moment to print it out now; we’ll use it in just a moment.
FUNDING ADVOCACY: Lobbying in Contracts
Narrator: Take a moment to look at the Lobbying Analysis Tool. This tool represents the process you should use when reviewing a grant proposal, to help you determine whether a proposal is fundable or not under the various lobbying rules we’ve been talking about.
Narrator: Take a look at the box entitled, Is it Lobbying?” The definitions of direct and grassroots lobbying will help you determine whether lobbying is present in a grant. Keep in mind that the definition of lobbying applies to contracts, too, since foundation funds cannot be earmarked for lobbying — whether the funding is in the form of a grant or a contract.
Narrator: Now that you’ve printed your Lobbying Analysis Tool, let’s use it to look at contracts.
Maya: Sure, sure. Before we do that, I’d like to get a couple of things done. I’d like to just hire this consultant to help do a legislative policy scan…
Narrator: Maya . . . wait . . .
Maya: …work on developing legislation, and then have them go talk with the Senator’s chief of staff to find out what he thinks about it!
Narrator: Maya wait! Wait! Let’s use the Lobbying Analysis Tool… Remember, lobbying rules apply to all Foundation funding, including contracts.
Narrator: Let’s jump right to the Lobbying Analysis for this contract. Ask yourself the questions seen here.
Maya: Hmmm…well, the answer to question 1 is yes. The consultant would plan to speak to the Senator’s chief of staff. And they’d be talking about legislation… Woah, this is lobbying and it’s in a contract!!! I guess I can’t do this.
Narrator: The Lobbying Analysis Tool should help you avoid some problematic situations in the future. Keep it handy!
FUNDING ADVOCACY: Spotting Lobbying in Grants and Contracts
Narrator: And now it’s time for a brain test! Read each scenario, and answer the questions for each. Click the best answers, then click submit. You’ll get some feedback when you’re done! Be sure to use your Lobbying Analysis Tool to help you complete this activity.
Narrator: If you notice some areas where you’d like to refresh your memory, now might be a good time to click the Course Map button, and then click any topic that interests you.
FUNDING ADVOCACY: Spotting Lobbying in Proposals and Reports
Maya: Ready to use what you’ve learned so far and take a look at some proposals and reports? I know I am! Here are a few examples of proposal text. Now, I need your help. Given what we just heard, some of the content in each proposal or report on my desk may include some lobbying.
Narrator: Now, remember a foundation cannot be the single funder of a grant that includes lobbying activities. Make sure to review reports, to make sure the grant funds were spent appropriately. Click the piece of each example that represents grassroots or direct lobbying activities.
Maya: Now that we’re done with that, click Next to continue.
FUNDING ADVOCACY: Importance of Proposal Review
Maya: [Yawn sound.] I am so tired. I’ll just skim this report. I’ve worked with this grantee before and I know they know the rules.
Narrator: Maya, can I get you a cup of coffee? Look closely! The foundation is the only funder of this project.
Maya: Oh no! This looks like lobbying. What should I do? What’s going to happen? I should call the grantee and find out what happened. How could they do this!
Narrator: Maya, it’s okay…this looks like something that you’ll need further assistance with.
Narrator: We’ll need to stop new payments to this grantee until this issue is resolved.
Maya: But the grantee needs the funds to put on a critical conference that is going to showcase two years of research on how to deliver health care more cost effectively. They’ve been planning this for a year. I can’t believe this!
Narrator: I understand this is a difficult situation, but you should access further compliance assistance immediately.
FUNDING ADVOCACY: Takeaways
Maya: Well, now I’ve got some key to help me proactively ensure compliance with our grants and contracts.
Narrator: Congratulations! You’ve completed this module. If you’re grant-making staff, click the pulsing play button to move to the next and final module, or click the course map to go to a specific topic.
ENGAGING IN ADVOCACY: Introduction
Narrator: Welcome to Module 3. Here, we’ll focus on engagement, specifically, how the advocacy and lobbying rules and restrictions relate to you as a foundation employee. I hope you’ve already taken the first two modules. They’ll help make this module more useful to you.
Maya: I’ve been pretty busy since we last saw each other. We’ve been moving forward with a bunch of proposals focusing on policy change and there’s been a lot of action on Capitol Hill. The new twist? One of our partners in Brazil is focused on preserving the Amazon, and… [Phone rings] Hello? Oh, hi, Joao! Bom dia! Great to hear from you. A conference? Oooh, preserving the Amazon? International attendees? Wow – I’d love to attend! Maybe even speak? Why sure, I can… (Engage_03)
Maya: Huh? Oh, hold the phone, Joao… What? This call is monumental! It means real progress in our change effort…
Narrator: Maya…careful now…
Maya: Urgh! What can I do? What do I need to keep in mind? I know, I’ll get everything started and commit to attend the conference and I can iron out all the legal mumbo-jumbo later and… (speeds up)
Narrator: Uh-uh. Hold up! Wait, Maya!
Maya: Okay, okay! Where do I start?
Narrator: As you learned in previous modules, a private foundation is not permitted to lobby or earmark funds to support lobbying by its grantees. These rules apply to activities within and outside the U.S. that are funded by the private foundation. The rules also apply to activities conducted by a foundation employee in his or her employee capacity.
ENGAGING IN ADVOCACY: Speaking Engagement Talking Points to Avoid Lobbying
Narrator: First off, let’s remember the components of direct lobbying activities. Click each term for a reminder. As a private foundation employee, you’re not permitted to engage in any type of lobbying.
Maya: So…I need some help determining what is and isn’t permissible to talk about.
Narrator: I’ve got you covered, Maya! Here are two questions to start off with: first, what will you be speaking about; and second, who will be in the audience? Speaking engagements are a good reason to seek assistance. Click the link shown here for a helpful set of talking points.
ENGAGING IN ADVOCACY: Spotting Lobbying in Speaking Engagements and Email
Maya: So…what’s okay and not okay for me to talk about at the conference?
Narrator: Let’s test your knowledge by planning your conference address. Here’s a list of your topics. Indicate what’s okay, and not okay, to cover at the conference by dragging and dropping each topic into the correct area Remember, government officials will be present at this conference.
Maya: Yes, mm-hmmm…uh-uh… Hey, look at this! An email from Joao in Brazil! Great… here’s the information I requested about the conference. Let’s see what’s being planned…
Maya [getting increasingly enthusiastic]: Wow! The Rainforest conference is underway! It’s going to create some terrific momentum around preservation. I know a bunch of people who have been waiting for this. I’ll just forward it to a few colleagues here, and to a couple other organizations…
Maya: …and to a couple of colleagues over there…oh, and he’ll definitely want to know…and so will she…
Narrator: Maya…Stop! Wait! Take a close look at that email…
Maya: Oh no! That’s right…by forwarding that email…
Narrator: …which includes a call to action…
Maya: I’ve engaged in grassroots lobbying!
Narrator: Let’s turn back the clock, shall we? Looks like you might need some guidelines about how to spot red flags…like the one we just saw in that email!
ENGAGING IN ADVOCACY: Grassroots Lobbying and Non-Lobbying Communications
Narrator: Remember that a call to action is the trigger for identifying a communication as grassroots lobbying. Click each image to view an example.
Maya: So, what can I discuss under the lobbying rules?
Narrator: Take a look at this advice.
ENGAGING IN ADVOCACY: Spotting Lobbying in Conversations with Legislators
Maya: Ok, I get it. I think I’d better do some research for my conference speech. I’ll call an old friend…she’s the Chief of Staff for a house sub-committee on preservation that covers forests and natural resources. Oh, hi, Sara…Maya here. Have you heard about the conference on Rainforest Preservation this year in Brazil? Yes, that’s right, Joao finally organized it! I’m really excited about it! I figured you’d be interested…
Narrator: Ok, let’s give Maya some feedback. Is this part of the conversation permissible or not? Select the best answer and click Submit to get feedback.
Narrator: Let’s continue with the next part of Maya’s call…
Maya: …so I’ll be giving a short talk during the conference, and I was hoping for some information from you to help me prepare…I’d love an update from the Hill with respect to legislation on rainforest preservation.
Narrator: Time for feedback! Is this part of the conversation permissible or not? Select the best answer and click Submit to get feedback.
Maya: What’s that? Sure, I’d be happy to share what I’m working on. What do you need? Yes, I do work with the Representative. Yes, I know about the bill he drafted — well, the bill that would allocate funding to maintain large blocks of intact forest lands in the rainforest. Oh, I’m happy to give you more information…
Narrator: Once again… Is this part of the conversation permissible or not? Select the best answer and click Submit to get feedback.
Maya: So, what are you working on?
Chief of Staff: (indistinct Charlie Brown sounds)
Maya: Oh, you’re working on drafting really important legislative proposals, including some specific language on how to work in a tax on carbon emissions? Sounds fascinating! Send me a copy of the text; I’d be glad to do a quick review and get back to you.
Narrator: Last one! Is this part of the conversation permissible or not? Select the best answer and click Submit to get feedback.
ENGAGING IN ADVOCACY: Knowledge Check
Narrator: And now it’s time for a brain test! Read each scenario, and answer the questions. You’ll get some feedback when you’re done! Be sure to use your course resources to help you complete this activity.
Narrator: Read the scenario, and then answer each question.
ENGAGING IN ADVOCACY: Takeaways
Maya: Thanks for joining me during this journey! Here are some takeaways to keep in mind moving forward.
Narrator: Well, that’s the end! You’re done with Module 3: Engagement! Remember, you can always click the Course Map button, and access any topic of interest to you. Use this course as a reference, as often as you need. If you want to return to the Home screen, then click…you guessed it…the Home button. On the next screen, you’ll be able to print a certificate of completion and complete a short survey. We hope you will take the time to complete the survey. Your feedback will help us design future courses!
Please click Certificate to download and print your certificate of completion, and click Survey to complete a quick survey. Your feedback will help us design future courses. Thanks!